• FTSE 100 jumps 91 points
  • US blue chips bounce back strongly
  • Petition asks for Monday off if England win Euro 2020

The FTSE 100 index ended at session highs on Friday, bouncing back at the end of a topsy-turvey week with US markets similarly rallying strongly.

At the close, the UK blue-chip index was 91.22 points, or 1.3% higher at 7,121.88, the day’s peak and well above the session low of 7,030.22

On Wall Street around London’s close, the Dow Jones Industrials Average was 440 points, or also 1.3% higher at 34,862, with the broader S&P 500 index ahead 1.0%. while the tech-laden Nasdaq Composite gained a more modest 0.8%.

Danni Hewson, financial analyst at AJ Bell commented: “Close your eyes and pretend yesterday never happened. Investors in the UK and across the pond seem to have done a Dorothy, clicking their heels and transporting markets back to pretty much where they were before yesterday’s sell-off.

“For London’s FTSE 100, miners led the charge upwards, not surprising considering all the COVID uncertainty is pushing people to take a hard look at their portfolios. Vectura was the standout performer on the FTSE 250 today following the news that Phillip Morris International has trumped a previous bidder for the company, all part of the big tobacco business’ strategy shift. It’s a move that’s gone down well with investors on Wall Street with the stock also trading higher.”

Hewson added: “Unsurprisingly the travel sector has had a good day as it enjoys a surge in bookings from hopeful holidaymakers, only TUI seems to have missed on the surge of optimism resulting from changing restrictions. There is still a huge question mark hanging over this summer which is why a legal challenge against the government has gone ahead today, clarity will help foster confidence and confidence means cash.

“All in all, it’s been a bumpy old week, with economic growth slowing, so it’s just as well we’ve got a little something to look forward to. But despite the pints that will be pulled this weekend and the pure joy that will leak into everyday life if England pull off victory, fear is never far away.

“Case numbers are rising and there will be many employers nervously waiting for a tsunami of pings when the post-match revelry is at an end. Precarious yes but precious none the less and after the year that was, we all need a little bit of something special to carry us through.”

3.40pm: Westminster under pressure to grant one-off Bank Holiday for Euro 2020 final

The Footsie regained momentum and spiked just before the start of the weekend, climbing 64 points to 7,095.

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Westminster is under pressure to grant a one-off Bank Holiday next Monday as England is taking part in the European Championship Final at 8pm on Sunday.

A petition reached over 330,000 signatures is asking to give the country the day off the next day if England win so families can “plan to be together for the event” on Sunday night as well as “continue to enjoy the win, giving the retail and leisure industry a much-needed opportunity to make up lost revenues” the following day.

The Prime Minister’s official spokesman said: “I don’t want to pre-empt the outcome of Sunday’s match. Clearly we want England to go all the way and win the final, and then we will set out our plans in due course.”

He also added that employers can offer the day off to their staff if able to do so.

Meanwhile, pubs are looking forward to a Euros boost to sales on Sunday after CGA’s Drinks Recovery Tracker showed that England’s semi-final with Denmark last Wednesday generated an average sales uplift of 13% against the same day in 2019.

However, this was only enjoyed by venues that screened games live, with sales rising 39% compared to a 21% drop in locations that didn’t show the match.

“Many drink-led pubs with big screens will have enjoyed their best week of post-lockdown trading yet, and Sunday’s final should deliver another bumper day,” said Jonathan Jones, CGA’s managing director, UK and Ireland.

“But with all venues still severely restricted and many consumers opting to watch games at home instead, the drinks sales uplift across the tournament is way below what we might expect in normal times. The four-week delay to the easing of COVID-19 restrictions has wrecked what should have been a catalyst for recovery in the drinking-out sector.”

Earlier this week, JD Wetherspoon PLC (LON:JDW) made a U-turn on a historic policy after missing out on sales driven by the Euros and allowed pub managers to show the semi-final on Wednesday if they wished to do so. Shares were up 0.5% to 1,169p on Friday before close.

2.43pm: Wall Street manages higher start

Despite predictions of a mixed start, the main indices on Wall Street managed to start Friday’s session on the front foot as traders attempted a rebound from yesterday’s selloff.

Shortly after the opening bell, the Dow Jones Industrial Average was up 0.65% at 34,646 while the S&P 500 climbed 0.51% to 4,342 and the Nasdaq rose 0.13% to 14,578.

Investor sentiment seems to have been boosted by a stabilisation in bond yields, as well as hopes that Thursday’s declines may have been more of a technical correction rather than evidence of a wider negative trend.

One of the standout performers in early deals was Stamps.com Inc (NASDAQ:STMP), which soared 61.9% to US$320 following a US$6.6bn takeover offer by private equity group Thoma Bravo.

Back in London, the FTSE 100 had lost a little momentum into late afternoon but was still 32 points higher at 7,062 at around 2.40pm.

2pm: Sainsbury’s stops selling CDs and DVDs

The FTSE 100 slowed down again in the afternoon and was up only 40 points to 7,071.

J Sainsbury PLC (LON:SBRY) will no longer sell CDs and DVDs as they have been trumped by the use of streaming services.

It will only keep vinyl records at some stores, even though CD sales generated £115mln last year.

It’s the only UK supermarket dropping the discs off its roster for now, as Tesco, Asda and Morrisons still stock them.

“Our customers increasingly go online for entertainment, so earlier this year we took the decision to gradually phase out the sale of DVDs and CDs, so that we can dedicate extra space to food and popular products like clothing and homewares,” Sainsbury’s told the BBC.

Shares dipped 1% to 282p on Friday.

1pm: UK government mulls plans to scrap quarantine for double-jabbed tourists from amber countries

The Footsie took a leap in the early afternoon and shot 60 points higher to 7,091.

The travel industry has been enjoying the boost from easier restrictions for double-jabbed UK residents coming from amber-list countries, as they will be able to skip quarantine from 19 July.

This doesn’t apply to people who haven’t received an NHS-administered vaccine, meaning the country remains off-limits for tourists.

However, transport secretary Grant Shapps said on Friday that Westminster is “actively working” on lifting the mandatory self-isolation foreigners who have been fully vaccinated in the country.

“The next thing is to be able to recognise apps from other countries or certification from other countries – easier done from some places like the EU where they have a digital app coming along than it is in the United States where I think they have 50 different systems, one for each state, largely paper based,” he told Sky News.

“So there are some complexities to work through there, but this is phase one, and we hope to follow it up quickly with double vaccinated people from other countries coming here.”

“Obviously we will look at whether they are World Health Organisation certified and the like and I would think, in terms of timescale, in the next couple of weeks I’ll be able to come forward and say more about other locations in the world.”

British Airways owner International Consolidated Airlines Group SA (LON:IAG) rose 2% to 184.58p.

12pm: Wall Street to see mixed open

The FTSE 100 trimmed its gains at lunchtime and was up 42 points to 7,072.

Wall Street is expected to see a mixed open, with the Nasdaq called 18 points lower at 14,694.

The Dow Jones Industrial Average and the S&P 500, instead, are expected to add 200 points to 34,494 and 14 points to 4,327 respectively.

Analysts at OANDA said that the green futures suggest that yesterday’s sell-off could have been simply a healthy technical correction rather than anything more ominous.

“Big tech could be under the spotlight as finance ministers and central bankers from the 20 largest economies meet in Vienna. Corporate tax reform will be at the top of the agenda, as the group looks to build on the momentum created at the G7 meeting,” said analyst Sophie Griffiths.

11am: Inhaled medicines specialist Vectura agrees £1bn takeover offer by Philip Morris 

The FTSE 100 held its gains in late morning, staying 55 points higher at 7,086.

In the FTSE 250, inhaled medicines specialist Vectura Group PLC (LON:VEC) surged 13% to 153.7p after agreeing to be taken over by US tobacco giant Philip Morris International Inc. (NYSE:PM).

The offer was 150p per share for a total value of £1bn, thwarting a 136p per share offer that Vectura previously agreed with private equity firm Carlyle at the end of May.

If the deal goes ahead, the pair will develop a new pipeline of products in the prescription drugs and over-the-counter categories, for example within cardiovascular and pain management.

Philip Morris said it is building a portfolio that goes “beyond nicotine” planned to generate at least US$1bn revenues by 2025, having identified respiratory drug delivery as a key focus.

“There seems to be an element of poacher turned gamekeeper for Philip Morris in this deal as it looks to use its expertise in inhalation for good – making Vectura’s inhaled drug delivery solutions a good fit,” said AJ Bell investment director Russ Mould.

“Vectura shareholders may be pleased this is an all-cash offer as many might have had ESG objections to being left with a position in a manufacturer of harmful cigarettes as opposed to a business working to improve people’s health.”

9.40am: easyJet benefits from holiday booking rush

The FTSE 100 continued its rise in mid-morning, jumping 54 points to 7,085.

Britons are rushing to book their summer holidays after the government scrapped quarantine from amber destinations for UK residents who have been fully vaccinated.

easyJet PLC (LON:EZJ) was up 3% to 940p after revealing that bookings to these areas rocketed 400%, the BBC reported.

“While this is arguably the biggest reduction in the UK’s international travel barriers, there remain obstacles from ongoing restrictions on UK residents entering many countries worldwide,” analysts at broker Liberum commented.

“Assuming the UK policy changes are not reversed, and are largely reciprocated by other countries, UK-exposed airlines are likely to have a reasonable opportunity to generate some cash for a short period this summer.”

8.35am: FTSE 100 takes GDP miss and Wall Street wobble in its stride to open firmly higher 

The FTSE 100 opened firmly in positive territory with traders willing to overlook a slight undershoot from the monthly gross domestic product data.

Output grew by just 0.8% in May and at a slower pace than April as bottlenecks offset a rebound for the hospitality sector. It means the economy is still 3.1% smaller than it was just prior to the pandemic.

Still, Richard Hunter, head of markets at Interactive Investor, was unperturbed by this latest blip.

“Quite apart from the benefits of freedom day, the elevated level of savings in the UK means that consumers have the financial firepower to spend,” he noted.

“In addition, and despite the easing of restrictions on overseas travel, many will already have staycations booked in the UK which should provide a further boost to the domestic economy.”

Certainly, the stock market took the latest data in its stride with concerns more centred on the outlook for inflation and monetary policy than the month-to-month growth trajectory.

The price-setters took a more bullish view on the travel sector than they had earlier in the week, marking British Airways owner IAG (LON:IAG) 2.5% higher in the opening exchanges. easyJet advanced 2.6%.

Vectura (LON:VEC) was up 13% after American cigarette maker Philip Morris counterbid for the inhaler specialist.

6.50 am: FTSE 100 set for a firmer start

UK stocks are set to open modestly firmer ahead of the release of gross domestic product (GDP) data.

Spread betting quotes indicate the FTSE 100 will open 16 points firmer at 7,047 despite a shake-out yesterday on Wall Street.

“While there are legitimate concerns about rising Delta variant infection rates across the globe, the UK economy still appears on course for the next stage of its reopening process on the 19th July despite similarly rising rates.

“What’s different in the case of the UK is lower hospitalisation rates, and though that could change, for now, the recovery looks good,” said CMC’s Michael Hewson.

US markets took a bath yesterday but were well off their worst levels by the close. The Dow tumbled 260 points to 24,422 and the S&P 500 shed 37 points at 4,321.

In Asia this morning, the Nikkei 225 is down 508 points at 27,610 in Japan but in Hong Kong, the Hang Seng is 178 points firmer at 27,331.

Today in London will see a trading statement from Senior PLC (LON:SNR), a fact that would not normally get highlighted but the stock is a market curiosity at the moment having recently seen off several bid approaches from private equity group Lone Star.

As such, the announcement is likely to be long on optimism and hints of better times to come but investors will have to wait until 2 August for a full market and strategy update.

On the macroeconomic front, the May GDP update will give a clue as to “how the UK economy has been playing catchup after a poor start to the year, as the January lockdown and the Brexit transition period came to an end,” according to CMC’s Michael Hewson.

“The latest UK economic data continues to point to a robust rebound as restrictions slowly get relaxed, with today’s focus on the latest industrial and manufacturing production data for May. These numbers are expected to reinforce this economic resilience if recent PMI data is any guide, though in the case of the April PMI’s the ONS numbers told a very different story.

“We saw big declines in both manufacturing and industrial production of -0.3% and -1.3% respectively, in April, largely as a result of plant closures and a slip in mining and quarrying, while manufacturing slowed due to weakness in the pharmaceuticals sector. Construction activity also slowed, falling 2%, though this needs to be put into the context of a big 5.8% rise in March.

“Despite this weakness, the May numbers are expected to be much better with gains expected for both, with recent industry surveys showing output at record levels. Industrial production is expected to rebound by 1.4% and manufacturing by 1%,” Hewson added.

Around the markets

  • Sterling: US$1.3777, -0.11 cents
  • 10-year gilt: 0.613%, +1.02 bps
  • Gold: US$1,801.20 an ounce, up US$1.00
  • Brent crude: US$74.22 a barrel, up 10 cents
  • Bitcoin: US$33,100, up US$312

6.50am: Early Markets – Asia / Australia

Stocks in the Asia-Pacific region were mostly lower on Friday as Olympics organisers banned spectators from the upcoming summer games in Tokyo, after a state of emergency was declared in the city due to rising COVID-19 cases.

In Japan, the Nikkei 225 fell 0.68% and South Korea’s Kospi slumped 1.25%.

The Shanghai Composite in China fell 0.11% while Hong Kong’s Hang Seng index rose 1.06%

Shares in Australia declined, with the S&P/ASX 200 trading 1.32% lower.

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